July 31 (Bloomberg) -- The Spanish government will
introduce debt ceilings for the 17 semiautonomous regions as
part of its plan to deepen budget cuts and prevent any default
without further burdening the central government’s finances.

The average limit is 15.1 percent of gross domestic product
for this year and 16 percent for next year, Antonio Beteta,
deputy minister for public administration, told reporters in
Madrid today following a meeting between the regions and Budget
Minister Cristobal Montoro.

A majority of regions voted in favor of the budget goals
that are calculated indivually, Montoro said.

Montoro is seeking to impose more austerity on the regions
after efforts to provide them, as well as cities and the welfare
system, with liquidity-burdened state finances. The government’s
first-half deficit exceeded its full-year target, data showed
today.

Prime Minister Mariano Rajoy is struggling to avoid a
broader bailout after gaining the right to borrow as much as 100
billion euros ($123 billion) from European rescue funds for
Spain’s banks. The country’s budget gap, the euro area’s third
largest, remained almost unchanged from 2010 at 8.9 percent of
GDP last year.

The yield on Spain’s 10-year bond rose 14 basis points to
6.75 percent today, compared with a euro-era high of 7.75
percent on July 25 even as Rajoy announced his fourth round of
austerity measures since Dec. 30. It fell after European Central
Bank President Mario Draghi said last week he would do whatever
is needed to protect the single currency.